By John Lee.

The National Investment Commission (NIC) has announced the following investment opportunities:

(Source: National Investment Commission)

(Picture: Business opportunity word cloud, from ibreakstock/Shutterstock)

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 12th September 2019).

Please click here to download a table of listed companies and their associated ticker codes.

The RSISX index ended the week at IQD620 (-0.3%) / $667 (-0.3%) (weekly change) (-6.0% and -6.1% YTD change, respectively). The number of week traded shares was 1.2 bn and the weekly trading volume was IQD1.8 bn ($1.5 mn).

ISX Company Announcements

  • ISX suspended trading of Dar Al-Salam for Insurance (NDSA) starting Sep. 12, 2019 due to the AGM that will be held on Sep. 17, 2019 to discuss and approve 2018 annual financial statements.
  • ISC approved giving Iraqi for Seed Production (AISP) 60 days to complete its capital increase procedures (from IQD10.50 bn to IQD13.65 bn through 30% bonus issue).
  • ISX suspended trading of Metallic & Bicycles Industries (IMIB) on Sep. 12, 2019 because the company failed to explain why the prices touched the higher limit on Sep. 9, 2019 and Sep. 11, 2019.
  • National Chemical & Plastic Industries (INCP) resumed trading on Sep. 11, 2019 after discussing and approving 2018 annual financial statements.
  • International Islamic Bank (BINT) resumed trading on Sep. 11, 2019 after discussing and approving 2018 annual financial statements.
  • Original shares of Asia Al Iraq Islamic Bank for Investment (BAIB) resumed trading on Sep. 9, 2019 after discussing and approving 2018 annual financial results and increasing the capital from IQD100 bn to IQD150 bn through 50% rights issue.
  • Iraqi Islamic Bank (BIIB) resumed trading on Sep. 8, 2019 after discussing and approving 2018 annual financial statements.
  • Cross transaction: 250 mn shares of Cihan Bank for Islamic and Finance (BCIH) on Sep. 8, 2019, which represents 0.1% of BCIH’s capital.

By John Lee.

Iraq’s Deputy Foreign Minister Muayad Salih has said that he expects Russian companies to increase their investment in Iraq.

Tass quotes him as saying that a Russian company is starting to develop of fields in the area of the Ramadi city, adding:

“Hopefully investments there will top $45 billion by 2030.”

Meanwhile, the head of the Legal Department at the Iraqi Foreign Ministry, Mr. Luqman Al-Faily, met with the Russian ambassador to Baghdad Mr. Maxim Maksimov, at the Ministry’s headquarters in Baghdad.

During the meeting, they discussed procedures for the mutual exemption of entry visas between the two countries for holders of diplomatic, service and special passports.

(Sources: Iraqi Foreign Ministry, Tass)

By John Lee.

Iraq’s Cabinet of Ministers has approved a loan agreement between the Federal Ministry of Finance, Standard Chartered Bank and the German Deutsche Bank for the purpose of financing the construction of 13 secondary substations (132) kV, and the supply of 35 high voltage transformers with the German company, Siemens, for the Ministry of Electricity.

The Cabinet also approved the recommendation of the Ministerial Council on Energy to expand Bismayah power plant.

(Source: Government of Iraq)

By Ahmed Tabaqchali, CIO of Asia Frontier Capital (AFC) Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The market drifted lower in an Eid-holiday shortened month, as turnover declined substantially from July. However, life found its way back to the banks. For the month, the market, as measured by the Rabee Securities RSISX USD Index (RSISUSD), was down −0.95% and down −4.89% for the year.

Average daily turnover declined −40% month-month and was the third lowest level over the last five years- the others being April 2019 and September 2018 as can be seen from the chart below. Foreign investors continued to be net buyers, consistent with the trend of the last few months, although at lower total levels in-line with the decline in total turnover.

(Sources: Iraq Stock Exchange (ISX), Rabee Securities, Asia Frontier Capital)

The market’s dynamics continue to improve with the return of life to the banking sector, which as a group cooled-off over June and July after a powerful rally in May led by the Bank of Baghdad (BBOB). This month, the group was led by the National Bank of Iraq (BNOI), which was up +21.1% for the month and up +58.6% from the April close before the sector started its rally.

Moreover, its earnings report for the second quarter 2019 (Q2/2019) supported management’s bullish outlook for 2019 as expressed in its latest AGM. As reported here, in June’s update, while management decided not to distribute dividends for a challenging 2018, it indicated the possibility of resuming dividend payments for 2019 based on its strong results for the first half of the year, as well as positive expectations for the second half.

BNOI’s first half 2019 (H1/2019) results show customer deposits were up +28% year to date, while its loan book was up +77% for the same period. Pre-tax earnings for the second quarter were up +48% sequentially, with the year to date figure showing promise for the year – a long way to go before recovering to pre-crises levels- but supporting management’s expectations for the resumption of dividend payments for 2019’s earnings.

While it’s not possible to extrapolate much from these results, or to generalize for the sector from them, they support in any case the thesis, made here in the last few months, which argues that the conditions are in place for the sector’s recovery in 2019-2020. The Commercial Bank of Iraq’s (BCOI) Q2/2019 earnings, while supporting this thesis, nevertheless show the unevenness of these conditions given the different circumstances of each bank. BCOI’s consumer deposits in H1/2019 were up +6% year to date, while its loan book declined by −7% – however, BCOI’s loan book is insignificant at under 8% of its deposits. BCOI was up +4.4% for the month and up +17.5% from the April close before the sector started its rally.

The most interesting development for the sector during the month was the trading action in the Bank of Baghdad (BBOB), which at some stage was up +10.7%, before trimming most of these gains, to end up +3.6%. This comes on the back of its four-month wild ride, during which it rallied +62.5% in May, declined −12.8% in June, declined a further −17.6% in July, to end in August up +20.8% from the pre-rally close.

The stock’s ride started on speculative hopes that BBOB would resume dividend payments for its 2018 results, sputtered as BBOB poured cold water over these speculative hopes during its recent AGM, but seems to still have plenty of fuel left. This could imply that the market is looking past the bank’s difficulties and focusing, instead, on the prospects of a bank following through with the recovery in its fortunes that began in 2018 as part of the overall conditions in place for the sector’s future revival.

The market’s looking past the weaknesses of BBOB is a further positive aspect of its improving dynamics as pointed here last month “While, BBOB pulled the other leading banks up with it in May, it did not drag them lower in June and July which is very different than the market’s responses to such disappointments in 2018. That time all banks were painted by the same brush, which shows a market that has begun to discriminate showing it has likely bottomed or is making a bottom.” The year to date chart below for four leading banks shows these very different responses.

Year to date indexed performance: Bank of Baghdad – BBOB (green), Commercial Bank of Iraq – BCOI (blue), Mansour Bank – BMNS (mauve), National Bank of Iraq – BNOI (brown)

(Source: Bloomberg)

The early picture of the trading activity in September suggests that it will likely be in-line with that of August. Whilst the market is in the early process of discounting the banking sector’s recovery, it’s worthwhile to point out its continued divergence from its past close relationship with oil revenues (a proxy for the forces driving the economy) – still at the widest it has been for the last few years (see below).

(Sources: Iraq’s Ministry of Oil, Rabee Securities, Asia Frontier Capital)

(Note: Oil revenues as of Jul, AFC estimates for Aug)

Please click here to download Ahmed Tabaqchali’s full report in pdf format.

Mr Tabaqchali (@AMTabaqchali) is the CIO of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years’ experience in US and MENA markets. He is a non-resident Fellow at the Institute of Regional and International Studies (IRIS) at the American University of Iraq-Sulaimani (AUIS), and an Adjunct Assistant Professor at AUIS. He is a board member of the Credit Bank of Iraq.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

By John Lee.

The Trade Bank of Iraq (TBI) has reportedly announced the launch of a new $100-million investment portfolio fund.

According to press reports, the Dananeer Fund has been set up in partnership with Cayman Islands-based Alpen Asset Advisors, and is structured as a “Segregated Portfolio Class B of the investment fund company“.

The fund aims to generate absolute returns through underlying investments in the USD-denominated Government of Iraq Bond, and endeavors to pay out semi-annual dividends.

More here.

(Sources: Zawya, Funds Global MENA)

By John Lee.

The National Investment Commission (NIC) has announced the following investment opportunities:

(Source: National Investment Commission)

(Picture: Business opportunity word cloud, from ibreakstock/Shutterstock)

By John Lee.

The National Investment Commission (NIC) has announced the following investment opportunities:

(Source: National Investment Commission)

(Picture: Business opportunity word cloud, from ibreakstock/Shutterstock)

By John Lee.

The National Investment Commission (NIC) has announced the following investment opportunities:

(Source: National Investment Commission)

(Picture: Business opportunity word cloud, from ibreakstock/Shutterstock)

The Iraq Britain Business Council (IBBC) was delighted to host H.E. Dr Abdullah Luaibi the Iraqi Minister of Transport in London today.

The Minister, accompanied by a delegation of officials, was on a 4 day official visit to the United Kingdom organised by the Department of International Trade.

His visit included meetings with IBBC Members Rolls-Royce and Serco, and a number of bilateral meetings with the British Government. UK companies play a leading role in aviation in Iraq and the Ministers visit cemented the existing ties while exploring new ventures.

By courtesy of Brigadier James Ellery and thanks to the generous sponsorship of Vitol, IBBC was fortunate to offer the Minister and his delegation Lunch together with about 20 IBBC Members and guests at the Cavalry and Guards Club on Piccadilly.

Members in attendance included representatives of Serco, Zaha Hadid Architects, Menzies Aviation, G4S, Al Burhan Group, Basra Gateway Terminal, HWH & Associate, Eversheds Sutherland, Stirling Education and Constellis.

Delegates at the Lunch were addressed by Baroness Nicholson, IBBC President and the Prime Ministers Trade Envoy for Iraq, and of course the Minister who expressed his great satisfaction about his visit and working so closely with the UK Government, UK businesses and the IBBC.

He also made it clear that establishing regular direct return flights between London and Baghdad was one of his top priorities and that he was looking at upgrading some of the major Iraqi transport infrastructure during his tenure.

IBBC’s Managing Director Christophe Michels commented:

Minister Luaibi has been a staunch supporter of IBBC members in Iraq over some years now, first as Deputy Minister and now as Minister. His office door in Baghdad is always open to us and I am pleased to say that UK companies lead the way in airport security, ground handling and air traffic control.

“Now we are looking forward for Rolls-Royce to work with Iraqi Airways and for one of the great UK architects and design companies to work on an new airport project in country.

For more information on the Iraq Britain Business Council, visit https://www.iraqbritainbusiness.org

(Source: IBBC)